Startups ponder what's next as Silicon Valley Bank finds buyer
REDWOOD CITY -- Leaders in the startup community remain optimistic about the strength of their industry and the role the Bay Area plays in driving innovation weeks after the collapse of Silicon Valley Bank.
Depositors of SVB learned on Monday they would now have accounts with First Citizens Bank.
"All I saw was a lot of breathless panic and a lot of memos being sent out that you should pull your money out of SVB," Punit Singh Soni remembers about the immediate aftermath of Silicon Valley Bank's failure earlier in the month. "But those three days weren't easy. We really were asking ourselves how are we going to make payroll on Monday morning."
Soni is the CEO of Suki, a digital assistant for doctors. The company started around five years ago and now has 150 employees around the world. Based in Redwood City, Suki is trying to help doctors avoid burnout by having their artificial intelligence app reduce the amount of the administrative paperwork.
"We are still a little small player in this market dominated by giants, and we have a long way to go," Soni explained to KPIX from inside the company's headquarters. "Not only is the layout and the feel that of a startup, the energy and vibe is also a startup, we work really, really hard."
As a customer of SVB, Soni said the bank was mismanaged and its leaders should face the consequences of their actions. But as the founder and CEO of a startup, he understands the needs of leading a new company and how certain banks can meet their unique challenges.
"SVB as a bank was a critical part of our community," he said. "This has happened. It actually has created a loss for us, in our community, in terms of our ability to actually move fast and actually do stuff."
Suki had the support of investors and private funds to protect itself, according to Soni. But he knows not all startups have a diversified banking approach, and that is why the collapse of SVB was such a scare to the industry. While it was an important and hard lesson for the community, he still wonders who can replace the cultural impact the bank had by providing resources that accommodate startups in ways other banks did not.
"There's never a bad time to start a company," said Founders Network CEO Kevin Holmes. "In fact, there's a lot of benefits to starting a company at a time like this."
Holmes acknowledges that SVB catered to founders and startups in ways other banks did not with favorable terms and mortgages as well as hosting events and making introductions for their clients. A founder himself who created a group to help others network and grow their startups, he still believes the entrepreneurial spirit of the Bay Area will remain strong without the bank.
While startups do follow the overall trend of the tech industry, Holmes says layoffs among major corporations have created a large pool of talent. He says the availability of qualified workers has never been as strong in more than a decade.
"People always want to fund good ideas, the funding remains there for the right opportunity," Holmes told KPIX. "Silicon Valley is not going away, the rumors of Silicon Valley's death has been vastly exaggerated."
He explained that while investments may freeze, the greatest concentration of venture capitalist dollars with committed capital remains in the Bay Area. The region is the center for startups around the world and the collapse of SVB will not stop people from supporting new companies.
"This really is not going to change any of those dynamics for the region as a whole," Holmes said.
Soni was not sure whether he would stay with SVB before the announcement that First Citizens would acquire its assets. He hoped regardless of what happened to the bank though that someone would emerge and play a similar role for startups.
"A part of me believes that it would be really cool if we continue to have a partner who understood the language and the DNA of startups among us in our community and I believe that the best way you can do that is if you can continue to start banking with them," Soni said.